Bangalore residential realty continues to grow
If sources are to be believed, rating agency ICRA expects the real estate market in Bangalore to continue to grow at the rate of four percent to six percent annually till FY 2015 led by the demand from new investors as well as migrants and continued growth plan of many IT, engineering and manufacturing companies based in Bangalore.
However, the demand may get effected post FY2015, in case the global economic slowdown continues cutting down IT/ITES related employment oppurtunities.
In the last two years, there was an increase in the number of residential projects under development which would increase supply of residential units in the market. At present, Bangalore is contributing to 33 percent of India’s IT exports and home to over 8 lakhs IT/ITeS professionals.
Over the last four years ended FY2012, there has been a growth at a compound annual growth rate (CAGR) of 6 percent in the total residential households in Bangalore, with an average of 94,000 new households being added every year. The total area that was launched in the 2012-2013 fiscal in Bangalore is three to four times higher than the area sold in the previous fiscal.
According to a recent report, the increase in supply of residential properties in absence of equal rise in absorption rates may result in an oversupply situation. ICRA says that, the city’s development will get infrastructure boost from its planned and ongoing infrastructure projects like metro (Phase I and II), peripheral ring road, Bangalore Mysore Infrastructure Corridor Project (BMICP), signal free outer ring road, BMRDA’s satellite townships and ring road network, high speed rail to BIA, mono rail and expressway to Bangalore International Airport.
These projects will provide the much needed support to Bangalore’s growing population base and with the improved connectivity, the surrounding areas will also be opened up for development. However, the water shortage issue will remain a big concern until a long term solution is worked out soon by the civic authority.
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